Competitive strategy and unique value: Monoprice

Monoprice picks new electronics products not based on how they complement the site’s lineup, but according to a simple rule: They have to be able to beat the mainstream price by a lot.

“Before we enter a product category, we make sure we have a product manager internally who’s an expert in that area,” says Kumar. “What we also do is try to make sure that we’re about 50% below what a retailer would be selling that product for.” A 10% discount, he says, isn’t enough to convince people to take a risk on an unfamiliar brand. This means no TVs, laptops, or smartphones.

Dig this as both a consumer and strategist. Makes me think of Clayton Christensen and Cory Doctorow‘s observations that market competition ultimately drives prices and margins to zero. If you want to prevent that, you need to be doing something that others can’t easily buy, copy or undercut.